SEARHC may acquire the Wrangell Medical Center down the road

The City of Wrangell may look for a private entity to manage or purchase the Wrangell Medical Center. Officials say the municipally-owned hospital faces uncertain finances and a deteriorating building. The top choice is the Southeast Alaska Regional Health Consortium, known as SEARHC, according to city officials.

Building a new hospital on the island could cost $41 million to $50 million. Interest could more than double the cost, according to the BDO Center for Healthcare Innovation and Excellence. The city hired the consulting company to estimate the costs of building a new hospital. Those findings were presented to the Wrangell Borough Assembly and the Wrangell Medical Center Board at a meeting this week.

The daunting cost prompted Assembly Member David Powell to ask if the city should find a private entity to run and even acquire the hospital.

“We better look at all our bases and possibly look at some kind of partnership if not the complete wash our hands and get out,” Powell said.

Borough Manager Lisa Von Bargen said she and the hospital’s CEO Robert Rang are discussing private options for the hospital. They’re already talking with the Southeast Alaska Regional Health Consortium, known as SEARHC.

SEARHC is a tribal non-profit that provides healthcare services in 20 communities across Southeast Alaska.

This year, SEARHC acquired Alaska Island Community Services. AICS runs a medical clinic and other community services in Wrangell. Von Bargen said having SEARHC already in the community makes it an obvious choice.

“SEARHC has a presence here in the community already that is significant,” Von Bargen said. “And if another entity were brought to town, that financial impact would potentially be lessened , because SEARHC, like any organization is a business. And they aren’t gong to want to give money to their competitor.”

SEARHC and the Wrangell hospital have a symbiotic relationship right now. The hospital contracts AICS doctors to work in the hospital’s emergency room. And AICS sends the hospital patients for x-rays and other lab work.

SEARHC Chief Operating Officer Dan Neumeister said he wants his organization to step in, if the hospital goes private.

“If we could get some type of perhaps a letter, a non-binding letter of intent, letter of confidentiality, where we could go forward,” Neumeister said. “[We could] work together for maybe the next four to six months and come up with a recommendation together as to how we could really provide a unified health system.”

Neumeister and city staff have already met with an architect to look at design options. He said SEARHC would pay for design plans if the city wants to go forward.

CEO Robert Rang didn’t sugarcoat the hospital’s financial situation. He agreed continued public operation won’t work.

Just two weeks ago, the Borough wrote a 250,000 check to the hospital to meet daily operation costs.

While the city already favors SEARHC, Von Bargen said there would be an independent review to make sure the city is getting a fair deal.

“If we decide we want to go down the road of working with search who happens to be an entity here in the community that has a vested interest in partnering with us, we certainly want to make sure there is a third party review of that with us to make sure we are doing the due diligence we need,” Von Bargen said.

The medical board will meet next week to decide if enlisting private companies is the way to go.